1. Field of the Invention
The invention relates to techniques, systems, and devices for managing, generating, distributing, authenticating, and redeeming virtual discount coupons via a network.
2. Description of the Related Art
Coupons, most-typically for use in retail sales, are a marketing tool for introducing new products to the marketplace, introducing new customers to a product, or to otherwise stimulate interest in a product. Various types of coupons, including discount, special-offer, rebate coupons, and the like, are a common marketing strategy, particularly for consumer goods and food items that are typically sold at groceries, drug stores, and discount stores. Product sellers and manufacturers use coupons to introduce new products, promote new and existing products, and increase sales. One highly useful characteristic of a coupon system is the capability of obtaining demographic information of consumer buying patterns.
Although coupon systems have many positive attributes, improvements are possible. Businesses continually seek improvements in operating costs. Coupons are commonly placed as advertisements in direct mailings, newspapers, magazines, and the like. Costs to product manufacturers and sellers are commonly substantial for coupon advertising placements.
Paper coupons are expensive to produce, even more expensive to distribute, and fail to produce a rapid response in the marketplace. Printing and distribution costs of coupon advertising campaigns are substantial, commonly with a very low response rate. The low response rate highlights the inefficiency of coupon advertising campaigns and gives evidence of costs, such as disposal and handling costs, that are not directly borne by manufacturers and sellers but are shared among all of society.
Low response rates are further indicative of reluctance of potential customers to expend the effort to use coupons. Usage of coupons is not cost-free to the customer. Many potential customers do not invest the time, space, and other resources to collect, catalogue, store, and retrieve coupons, as well as to manage coupons having various expiration dates. Coupon handling is time-consuming and cumbersome.
Often, only consumers on a strict budget, with excess free time, or who enjoy couponing as a hobby have sufficient time to use coupons. Busy or more affluent consumers often do not consider coupon management to be a cost-effective usage of time. These busy and more affluent consumers represent a more desirable demographic for many product manufacturers and sellers.
Businesses that redeem the coupons bear similar storage, handling, and management costs, including expenditure of valuable employee time for retail store reimbursement. The system of clearing distributed and redeemed coupons involves physically sending redeemed coupons to a clearinghouse. The clearinghouse returns the coupons to the issuer and tallies debits and credits to the manufacturer and retailer. Physical handling of coupons is expensive, cumbersome, error prone, slow and prone to fraud.
Electronic distribution of retail coupons reduces cost in comparison to printed coupons, but require measures to prevent fraud. Proposed fraud prevention systems are either burdensome for the consumer or costly for retailers to implement.
Manufacturers use retail coupons to introduce consumers to new products, as well as to clear distressed inventory. Coupons are generally printed and passed to a distribution company, which either mails the coupons to consumers, or authorizes newspapers to print the coupons. Typical response rates are in the range from 3% to 5% for untargeted coupons, and in the range from 5% to 7% for coupons sent to likely target consumers. The coupons are used by consumers during a retail purchase transaction. A bar code on the coupon is scanned. The coupon is reported for anti-fraud purposes, and the appropriate price reduction is granted to the consumer. A the end of a sales period, typically a month, the retailer presents a report to the manufacturer who compensates the retailer for the coupons redeemed.
Various solutions have been attempted to solve these problems with coupons. One approach is to allow consumers to print their own coupons. This solution reduces distribution costs and latency, but requires the consumer to bring the paper coupon with them while shopping. The solution does not allow for opportunistic shopping, which accounts for the majority of retail purchases.